Coleman Company has a target debt-to-equity ratio (i.e., D/E, not the weight of debt D/(D+E)) of 0.8 and a beta of 0.7 Coleman's pre-tax cost of debt is 10% and the 10-year Treasury currently yields 4.7%. The tax rate is 40% and you estimate the market risk premium is 6.2%. Calculate Coleman's weighted average cost of capital (WACC).

Answer rating: 100% (QA)

To calculate Colemans weighted average cost of capital WACC we need to first calculate the cost of e... View the full answer